This Cordillera home is currently on the market for $10 million.
Berkshire Hathaway HomeServices Colorado Properties / Courtesy Photo

Eagle County in 2021 set another record for real estate sales, reaching nearly $4.3 billion. Perhaps the biggest news is the number of buyers who paid cash for new homes.

The latest data from Land Title Guarantee Co. shows that the Valley market has passed a number of milestones, including:

  • $615 million in sales in Vail Village, the highest figure of any region in the county
  • 124 home sales of $5 million or more
  • 354 sales of vacant lots
  • The average selling price in the county was $2.04 million

Of all the numbers, the one that stands out is the percentage of homes sold for cash: 42%. It’s a lot.

Ron Byrne, owner of Ron Byrne Associates Real Estate, has long worked at the high end of the market. Cash sales are quite common in this part of the market. Byrne said many of those cash buyers for multimillion-dollar homes finance those homes after purchase. This practice is starting to be more common at lower prices, largely because today’s market is so competitive.

The market is so competitive, in part because so few homes end up in the Vail Board of Realtors’ multiple listing service.

Not much there

Steffan Mehnert, team leader for Keller Williams Mountain Properties, noted there were around 800 property listings when he arrived in the Valley in February 2020. After a stellar market in the second half of this year, he there were only about 250 ads. Currently there are less than 150 listings. The Vail Board of Realtors has approximately 800 members.

And, Mehnert added, about 100 of the homes listed cost $3 million or more.

The listing shortage isn’t just in Eagle County, Mehnert noted, adding that the national home market is short by at least 4 million units.

This competition for homes means cash is king. But where does this money come from?

Mehnert noted that the country’s financial markets are on a 10-year horizon. It created a lot of new wealth. Other buyers take out home equity loans to make their purchases. Other companies offer buyers to lend money for a purchase and then finance the home once it changes hands.

Many of these companies are already strapped for cash, Mehnert added.

In addition to the current competitive market, Vail Valley’s integrated attractions add even more pressure on buyers.

This is good news for sellers, of course. But, Mehnert said, “the days of first-time buyers using an FHA loan…are over,” for first-time buyers. “It’s crazy what’s going on,” he added.

Cash facilitates sales

For sellers, cash offers trump almost everything else, Mehnert said.

“A seller will take the least potential headache,” he said, noting that it’s hard to discuss closing in 14 days without reviews or inspections.

That’s why Eagle County’s “Bold Housing Moves” initiative is helping qualified buyers with cash offers on homes. City of Vail officials are talking about a similar effort as interest in the Vail InDEED program wanes, largely due to rising prices.

While registrations are lagging, offers are still going.

“The conventional wisdom is that low inventory will generate fewer sales,” said Michael Slevin, owner of Berkshire Hathaway HomeServices Colorado Properties. But, he added, inventories in 2021 were well below levels seen in 2020, but deals were still done. Many of these deals were completed before a home landed in the multiple listing service.

Slevin believes the Valley will have another strong year, largely due to pent-up demand. This demand should remain strong due to inventories, even if interest rates are expected to rise this year.

Depending on the neighborhood, “we’re still seeing properties come on the market that garner 10 to 15 bids,” Slevin said.

But, he added, finding a way to attract first-time buyers to the market is something the community “needs to have in mind”.